Fort Smith’s share of county sales tax up more than 15% through November

by Tina Alvey Dale ([email protected]) 510 views 

As the final months of 2021 are tabulated, Fort Smith’s sales tax revenues continue to be significantly higher than expected. Fort Smith’s share of the Sebastian County sales tax was $1.789 million in November, 15.5% higher than the $1.549 million collected in November 2020.

Revenue collected from the city’s share of the Sebastian County sales tax in the first 11 reporting months of the year is up 15.4% compared to the same period in 2020. From January through November, the tax has brought the city $19.205 million in revenue in compared with the $16.645 million collected from the tax in the first 11 months of 2020, according to the city’s November Sales Tax report. Numbers in November’s report reflect October’s transactions.

The city’s share of the countywide tax is important because the revenue provides money for the city’s general fund budget, with much of that budget paying for police, fire and other essential city services.

In the 2021 budget, the city budgeted $1.511 million in revenue from the tax in November, bringing the month’s collections $25.69% over budget.

Fort Smith’s 1% street tax – used for maintenance and new construction on streets, bridges and drainage – generated $2.2 million in November, a 14.6% from the $1.92 million in November 2020. The city’s budget estimated the city would collect $1.782 million in the month, which makes the city’s actual earnings from the tax 23.44% above budget. So far for the year, the city has collected $23.866 million from the tax, up 15.36% from the 20.688 million collected in the first 11 months of 2020.

City Director Lavon Morton said November’s numbers are continuing the trend of strong sales tax collections in the city is good news for 2022.

“Based on inflation news, there will almost certainly be cost increases for raw materials used by the city and in the cost of construction contracts, so additional revenue is helpful. The budget for 2022 sales tax revenue is appropriately conservative to ensure that spending considers the potential for lower revenue,” Morton said.

City Director Neal Martin also believes the city needs to keep a conservative approach to budgeting for 2022.

“Fort Smith has been on a pretty good roll this year and it speaks to the health of the economy,” Martin said. “This won’t change the budget for 2022, as we need to continue to be conservative in our approach.”

He said the board of directors needs to make certain it makes policy and decisions that continue to drive revenue numbers higher.

“Setting policy that encourages business development and investment is the best way to keep these numbers going up. Being able to provide good, quality jobs through business expansion, growth, and new business will be the best long term strategy,” Martin said.

In 2020, Fort Smith’s share of the 1% Sebastian County sales tax was $18.246 million, up 5.7% over 2019, and up 5.52% over the city’s budget estimate. The 2020 total was $953,824 more than city officials budgeted to spend within the general fund budget. The tax has posted year-over-year gains for the past five years, but 2020’s jump was the largest seen during that time period.

The 1% street tax generated $22.66 million in 2020, up 4.02% over 2019, and up 6.08% over the budget estimate. The 2020 total was $1.298 million more than city officials budgeted to spend on the street tax program.

Fort Smith 1% sales tax collection for streets
2020: $22.66 million
2019: $21.73 million
2018: $21.503 million
2017: $21.204 million
2016: $21.156 million

Fort Smith portion of 1% countywide sales tax
2020: $18.246 million
2019: $17.265 million
2018: $17.043 million
2017: $16.691 million
2016: $16.58 million